By James A. Schnur, CCIM
President and Designated Managing Broker
Integrated Real Estate Solutions
Companies relocate for many reasons. They’re expanding and need the space, or seek closer proximity or easier access to their suppliers and customers. The goal could be to cut overhead costs—short- and/or long-term. The company might be in need of more resources than the current location readily provides.
The human factor is one of the strongest drivers for the corporate relocation decision today. The workforce is changing, with a growing population of Baby Boomers reaching retirement age. The impact of Millennials (born after 1980) has changed the way many industries view their workforce.
The urban migration
A year ago, General Electric, for example, announced its decision to move its headquarters from suburban Fairfield, Connecticut, to Boston. The company wanted to improve its appeal to a younger workforce by relocating to an urban center. With some of the country’s most heralded universities situated near the city—MIT, Harvard, Tufts, to name just a few—GE could draw from an expansive core of intellectual talent.
Motorola Solutions has maintained its corporate headquarters in the Chicago suburb of Schaumburg to for 50 years. Prior to that, Motorola was located in downtown Chicago. In 2015, the company announced plans to move back to the city, where it began 87 years earlier. The Chicago headquarters will house Motorola’s venture’s group, chief technology, information technology, and software engineering groups. Motorola’s CEO, Greg Brown, said the move to the urban center would provide “greater access to high-level talent.”
Like Motorola, ConAgra Foods chose downtown Chicago for its new corporate headquarters, after spending nearly a century in Omaha. CEO Sean Connolly chose the urban setting because it gave ConAgra “the best shot to attract the kind of talent this company needs to rebuild its brands and come up with new ideas.”
The availability of labor is the number one factor in determining location according to Area Development Magazine’s 2016 survey for corporate relocation decisions. Companies that have set their sights on recruiting young workers for highly skilled and high-level positions recognize the importance of going to them. Millennials place an emphasis on quality of life. While earlier generations were willing to relocate for a new job, Millennials will only go where the lifestyle meets their needs, first and foremost.
Manufacturing facilities, distribution centers, and other operations may have more flexibility in terms of where to find the appropriate labor.
Quality of life
As you’re contemplating your relocation options, consider the lifestyle factors that are important to your workforce.
While Millennials are garnering considerable attention—because of the size, age, and skills of the population—you’ll need to do more than meet the present lifestyle needs. Having a walkable lifestyle is appealing right now, but, at some point, your independent young workers will want to buy a home and maybe raise a family. Consider the cost of living, the housing market, the school systems, and crime rates.
The quality of life will not only contribute to your ability to attract skilled workers, but it will also give you added value for retaining them. A job in a great location—defined by amenities, accessibility, lifestyle, cost of living—can outweigh just a great job. From a fiscal perspective, the cost to hire, train, and bring a new employee up to the required productivity levels can be up to five times more than the investment in retaining a worker. So, minimizing turnover should be a key factor in your corporate relocation decision.
If relocation might be on your corporate horizon, contact Integrated Real Estate Solutions at (847) 500-0160, via e-mail, or on the web at www.ireschicago.com to discuss your goals, options, and the vast opportunities that lie ahead.
Integrated Real Estate Solutions, Inc. provides clients with the in-depth knowledge and experience that is critical to determicne the right path to your next move, lease renewal, or strategic repositioning of your real estate portfolio. Contact us or call 847.550.0160 today about your needs, and put our success to work for you.